Hydrocarbon resources

All hydrocarbon resources in the soil and the subsoil, in interior waters and in the territorial sea, on the continental shelf and in the exclusive economic zone are typically the province of the state. However, it is often the case that states with significant hydrocarbon resources do not have easy access to risk capital and lack the  technical expertise to explore and develop the hydrocarbon resources located in their territory. In these cases, the task of finding and extracting oil and gas is delegated to an international (and in some cases domestic) oil company (IOC) which possesses the expertise and financial resources to undertake the task. The relationship between the state and the IOC must then be regulated by some type of legal instrument or contractual framework which specifies the rights and obligations of each party …

– Geoffrey Picton-Turbervill (ed), Oil and gas: a practical handbook (Globe Law and Business, 2009), p27.